U.S. issues first shallow-water drilling permit

The U.S. Interior Department issued its first shallow-water drilling permit since offshore exploration companies were required to meet two sets of new safety regulations in response to the BP oil spill, a department official said on Monday.

Apache Corp, which is seeking to purchase billions of dollars in BP assets, was approved to drill in Gulf of Mexico waters that are less than 500 feet deep.

Companies have not been allowed to get new shallow water drilling permits until they abide by new government safety requirements. Apache was the first to meet them all, the department said.

The U.S. Interior Department issued its new offshore drilling moratorium for deepwater drilling last week that will last until November 30.

The moratorium is being challenged by the industry in the courts. The ban and safety requirements for shallow-water drilling are also being criticized for costing jobs and creating more economic hardship for Louisiana.

The new directive from the Interior Department allows shallow-water drilling -- in depths of up to 500 feet (150 meters) -- to continue if rigs are in compliance with the safety rules.

• The new rules call for certification from a professional engineer before beginning any new drilling operations.
  

• They also call for new procedures for well casing and cement, and
  
  
• must be ready to conduct at least two tests of cement barriers in underwater wells,
  
  
• and follow new casing installation procedures on wells.
• and third-party verification of the blowout preventer -- the device that failed in the BP-operated Deepwater Horizon operation.

• provide information on how much oil or natural gas might leak from a blowout.
  
  
• and provide information on how quickly the companies could act to control any spills, which should include estimating the time it would take to contract for a new rig, move it on site and drill a relief well to plug the blowout well.

"Oil and gas from the Outer Continental Shelf remains an important component of our energy security as we transition to the clean energy economy, but we must ensure that offshore drilling is conducted safely and in compliance with the law," said Interior Secretary Ken Salazar.

Many Gulf Coast officials and lawmakers have urged the Interior Department to move faster on approving shallow-water drilling permits, so the region can salvage its high-paying oil jobs to help offset some of the losses in its fishing and tourism industries caused by the oil spill.

Source:
Reuters, "U.S. issues first shallow-water drilling permit", accessed July 19, 2010